TD seeks injunction to prevent Government ratifying ESM treaty

INDEPENDENT TD Thomas Pringle is to seek an injunction restraining the Government from completing ratification early next month of the European Stability Mechanism (ESM) treaty providing for a conditional permanent bailout fund for the 17 euro zone states.

Mr Pringle will apply for the injunction once the relevant legislation is passed, as expected, by the Dáil and Seanad within the next eight to 10 days but before it goes to the President to be signed into law, senior counsel John Rogers, for Mr Pringle, told the High Court yesterday.

After the Oireachtas approves the legislation, a five-day period must elapse before the President may sign it into law and Mr Pringle will apply for the injunction then, counsel said. If the President signed the legislation into law, there would be “a new situation” and Mr Pringle was contending the legislation was unconstitutional.

Mr Pringle had hoped the injunctions would not be necessary and that the State would undertake not to ratify the treaty pending the outcome of what his side believed would be a referral of issues to the European Court of Justice (ECJ) for determination, counsel said.

It was clear from issues raised in Mr Pringle’s challenge to the ESM treaty that matters would have to be referred to the ECJ, counsel added.

Michael Cush SC, for the Government and the State, said they envisaged the court would decide the constitutional issue (whether the ESM treaty breached the Constitution) and that the decision on constitutionality did not lend itself to injunctive orders. An injunction only arose if the court decided to refer issues to the ECJ and the State would be urging the court not to refer, he said. If the court did decide to refer, there would then have to be a debate on whether there should be an injunction pending the ECJ’s answer.

In those circumstances, Ms Justice Mary Laffoy has adjourned to Tuesday the continuing hearing of Mr Pringle’s action in which he contends the ESM treaty breaches the Irish Constitution, EU law and EU treaties – the Treaty on the Functioning of the EU and the Treaty of the EU – on grounds including that those treaties do not allow for bailouts. The ESM treaty provides for the creation of a new ESM financial institution, akin to a bank, to provide bailout funding on strict conditions to distressed states in the euro zone. The 17 euro zone states are required to make a capital contribution to the new institution, with Ireland’s contribution set at €11.14 billion. In his claim of unconstitutionality, Mr Pringle alleges the ESM treaty breaches the Constitution on grounds including that it dilutes the State’s fiscal sovereignty. He claims the ESM treaty and fiscal treaty, approved by a referendum here last month, are interlocked and that the ESM treaty should, and must, be put before the people in a referendum.

In its defence, the Government denies the ESM treaty is unconstitutional or breaches the EU treaties and EU law. It also denies the fiscal treaty is dependent on the validity and effect of the ESM treaty or on the proposed amendment of article 136 of the Treaty on the Functioning of the EU.